Scotland universities: Business chiefs fear international standing of universities being put 'at risk'

They said action was urgently needed to address the growing “gap” in funding faced by higher education institutions. The intervention comes after universities were told last month how they would be impacted by a £28.5 million cut in funding.

The Scottish Funding Council (SFC) axed the £7m Upskilling Fund as part of the reduction, and removed £4.8m of support for pension contributions.

The Scotsman revealed how the principals of Aberdeen and Robert Gordon universities had written to MSPs calling for the spending squeeze to be urgently reversed.

George Boyne and Steve Olivier expressed “deep concern” in a joint letter to MSPs and ministers, warning the cuts were “stymying” the ability of their universities to boost the local economy, jobs and research. Now senior figures in the business world have also raised concerns about the prospects for the higher education sector.

Dr Liz Cameron, chief executive of Scottish Chambers of Commerce, said: “It is disappointing to see further funding for universities cut, particularly at a time of acute skills shortages and significant pressure on university budgets across the country.

“Scottish universities are now facing down the barrel of their toughest funding settlement in recent memory, with nearly £30m worth of cuts to the teaching budgets for 2024/25. Universities are finding it challenging to handle these cuts whilst continuing to offer the high-quality education that our students deserve and economy needs.

“At the same time, our universities face increased difficulties in attracting international students. In recent years, these have been relied upon to cover the shortfall in Government funding in every Scottish student’s place.

“Cuts to the education budget and changes to the UK immigration system are placing our world-leading university sector at risk. Steps must be taken to address the funding gap that is growing as a result.”

The Upskilling Fund had been running for five years, with the aim of supporting universities to offer flexible ways for people to upskill or reskill in strategically important curriculum areas, including industries helping the transition to a “net zero” economy, as well as the recovery from Brexit and the Covid-19 pandemic.

It included courses focused at either undergraduate or taught at postgraduate level. The removal of the money follows the axing of the £10m Flexible Workforce Development Fund, which has also concerned the business community. Clare Reid, director of policy and public affairs, at Prosper, formerly known as SCDI, said: “As Scotland's economy changes and its workforce ages, it's clear that more investment must be made in reskilling and upskilling existing workers to improve productivity and grow industries.

“Skills are the highest priority for many businesses at present and the Upskilling Fund supported business-focused training. Funding is clearly very tight, but it's very disappointing that it's been removed when the immediate and long-term needs are so strong.”

Scottish universities have already been cutting courses and jobs, with Robert Gordon University planning to remove up to 220 posts as part of a voluntary severance scheme, opened to help save £18m.

There are fears further difficult decisions will have to be made in coming months, following what the sector has described as “by far the toughest funding settlement universities have faced”.

The cuts were confirmed as universities face a downturn in the number of fee-paying international students, which in recent years have helped institutions cover the cost of diminishing grants.

Minutes of a meeting last month of Edinburgh University’s court said: “It was noted that inflationary pressures and patterns of international student recruitment, which had affected the UK higher education sector as a whole, had both had an impact on finances. Budget holders had been asked to consider expenditure carefully as part of the planning round that would lead to an institutional budget for 2024-29.” On January 1, the UK government banned international students from taking family members with them when they come to study in the country, unless it was for postgraduate research courses and courses with government-funded scholarships.

Home secretary James Cleverly said “ending the unreasonable practice” would help cut migration by the tens of thousands of people, and contribute to an overall strategy of preventing 300,000 people from coming to the UK.

In February, data from more than 60 UK universities showed the number of study visas issued had fallen by about a third this year compared to the same time last year. A separate survey of 70 universities by Universities UK found enrolments in postgraduate-taught courses were down by more than 40 per cent since January’s immigration changes. Prof Boyne, the principal of Aberdeen University, has signalled he believed a Labour victory in the coming Westminster election could help reverse the recent downturn in international students, amid hopes of “more welcoming language” from the government, although he said any “uplift” might not materialise until 2026/27.

A spokesman for the SFC said: “The University Upskilling Fund has helped develop a suite of commercially attractive, bite-sized courses for industry. In a challenging funding settlement, we can’t fund everything as before.

“So, we have made some difficult decisions in order to protect core learning and teaching provision for new and continuing Scottish students. We know universities will keep developing their curriculum to respond to employer needs, and they can consider how best to deliver course material already developed using the Upskilling Fund.”

A Scottish Government spokesperson said: “Our universities play a pivotal role in Scotland’s economy and society – and despite facing the most challenging budget since devolution, the Scottish Government will continue to invest over £1 billion on teaching and research, including an increase in funding for research and innovation. This will ensure our universities continue to play a pivotal role in Scotland’s economic growth.

“We are seeing record numbers of young people aged 19 and under securing a university place including record numbers of students from our poorest communities as a result of Scottish Government investment in our universities – and ministers are determined to ensure the sector continues to thrive.”